On December 14, the Australian Government stated that it is taking enough steps to improve the regulation of crypto service providers. The Government will issue a consultation paper in early 2023 to determine which digital assets will be regulated.
The move is part of a plan to modernise Australia’s financial system, and it follows the collapse of FTX, which forced the management of its Australian entities to hand over control to licenced insolvency practitioners, who independently assess the financial situation.
The Albanese government intends to define which digital assets should be subject to financial services laws and what rules are necessary to protect consumers.
The next steps in the Government’s ongoing ‘token mapping’ work will include the release of a consultation paper in early 2023 to inform what digital assets should be regulated by financial services laws, and the development of appropriate custody and licensing settings to safeguard consumers,
said the joint release by Australia’s Treasurer Jim Chalmers MP and Assistant Treasurer and Minister for Financial Services Stephen Jones.
The Government will evaluate which tokens or digital assets should be regulated by financial services laws as part of its current ‘token mapping’ work. The token mapping entails uncovering the characteristics of all digital asset tokens in Australia, including charting the type of crypto asset, its underlying code, and any other defining technological feature.
The consultation paper will solicit feedback until February 6, 2023, and will cover a wide range of aspects in the crypto ecosystem, including digital wallets, stablecoins, crypto-assets, and central bank digital currencies.
It will include investigating “the policy rationale for an Australian CBDC, including economic, legal, regulatory, and technological considerations associated with an Australian CBDC.” The Australian central bank expects to complete its CBDC pilot programme by mid-2023.
Though the Albanese government is taking steps to regulate crypto service providers in Australia, actual legislation will not be enacted until the Government consults on its proposed custody and licencing framework.
Along with crypto, the Government will release a Strategic Plan for the Future of Australia’s Payments System and act on Council of Financial Regulators (CFR) recommendations to improve Australia’s financial market infrastructure.